Investment is a complex endeavor that requires the implementation of effective strategies and the continual adjustment of one’s financial profile in response to evolving market conditions. In India, many individuals aspire to become crorepatis; however, the path to achieving this ambition presents significant challenges for investors. To amass such wealth, it is essential to employ specific formulas tailored to one’s unique financial situation. There are various strategies available for both 10-year and 20-year investment horizons.
Regardless of the specific rules you choose to follow, the fundamental principle remains unchanged: consistent investment, selection of high-growth assets, and the utilization of compounding are crucial. When these principles are applied with a long-term perspective and financial discipline, they can facilitate the attainment of your Rs 1 crore objective. Let us delve into the essential investment guidelines:
1) Rule of 72: Double Your Money
The Rule of 72 is a simple mathematical concept that tells you how many years it will take for your money to double at a given rate of return. To calculate, divide 72 by the annual rate of return you expect from your investments.
Example:
12% Return: 72 ÷ 12 = 6 years to double your money.
15% Return: 72 ÷ 15 = 4.8 years to double your money.
If you want to become a crorepati in 20 years, using an investment with a 12%-15% return, your money could double several times during the period.
Also Read: Top 10 mutual funds for doubling your wealth over time
2) 10-12-10 Rule for a 10-Year Goal
The 10-12-10 rule suggests that by investing Rs 10,000 per month for 10 years in an asset yielding 12% annual returns, you can accumulate approximately Rs 23-24 lakh. To reach Rs 1 crore in 10 years, you will need to invest more aggressively.
Breakdown:
Monthly Investment: Rs 43,000 (for a Rs 1 crore goal)
Duration: 10 years
Expected Return: 12% per annum
Example: If you invest Rs 43,000 per month in equity mutual funds or stocks with an average annual return of 12%, you could accumulate around Rs 1 crore in 10 years.
3) 20-10-12 Rule for a 20-Year Goal
The 20-10-12 rule is a longer-term investment strategy. It suggests that by investing Rs 10,000 per month for 20 years in an instrument that yields 12% annual returns,
» Read More
